Sahara Petrochemical and Sipchem consider merger

MOSCOW (MRC) -- Saudi Arabia's Sahara Petrochemicals and Saudi International Petrochemical Co (Sipchem) have announced the beginning of initial talks on a potential merger, informed GV.

The Zamil Holding Company Group, one of the Kingdom's most prominent family businesses, is a major shareholder in both companies.

A feasibility study will be carried out by the two companies over the next five months, with the plan then put to shareholders and the regulator for approval, separate statements from both companies to the Saudi stock exchange said.

As MRC reported earlier, Sahara Petrochemicals' net profit in 2012 amounted to SR 204.45 million compared to SR 411.58 million for the previous year with a decrease of 50%. However, the company's net profit surged 1,187 % to SR64.49 million in the fourth quarter of 2012 compared to SR5.01 million for the same quarter last year, and an increase of 48% from SR43.71 million from the preceding quarter.

Saudi International Petrochemical Co (Sipchem) has posted a 57.5% fall in first-quarter net profit, citing shutdowns at a number of plants during the period for the decline in earnings.

Sadara Chemical Company is a joint venture, formed by Saudi Aramco and The Dow Chemical Company in Saudi Arabia.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC

MOSCOW (MRC) -- Central European countries including Germany, Austria, the Czech Republic, Hungary, Slovakia and Romania have been struggling with devastating floods due to rising rivers since earlier this week which resulted in with deaths across the region, according to Apic-Online.

Meanwhile, production at some chemical and petrochemical companies was also reported to be affected from the heavy flooding with production or delivery disruptions emerging for PVC, PS and PE.

Two Polish companies reportedly halted their petrochemical production given safety issues caused by severe weather conditions. Anwil declared force majeure on the output from their plant in Neratovice, Czech Republic earlier this week. The force majeure is expected to remain in place until June 20, according to industry sources. The company normally produces 130,000 tons/year PVC at the facility.

In addition, Synthos had to shut all units at their petrochemical complex located in Kralupy, Czech Republic. The company reportedly stated that their power plant was flooded with water. The facility houses a 30,000 tons/year GPPS and a 50,000 tons/year HIPS plant in addition to a 170,000 tons/year styrene and 90,000 tons/year butadiene plant.

A distributor in Italy reported, "A Central European producer declared a force majeure on their PVC output due to severe weather conditions which caused a flood at their warehouses. Therefore, they cannot offer their material until they verify the conditions of the products."

A packaging converter in Italy also mentioned that he asked for 8 cargoes from his Central European PS supplier, but he received only 2 cargoes as the seller has limited availability due to adverse weather conditions.

A source from a Serbian polymer producer who offers PE materials to Turkey also commented on the situation. "We are still providing smooth and normal deliveries by truck but our rail shipments have been delayed for several days due to the floods in Europe." He hopes that their rail deliveries will normalize by Sunday or Monday. Players in Turkey reported tight prompt PVC supplies in the south region this week. Some players noted that it may ease thanks to the materials on the way whereas some other players claimed that all those en-route materials were already secured.

A source at a Hungarian petrochemical producer also reported, "We have had to recall some trucks from flooded areas of Germany and rail deliveries are facing delays through Austria as the government is limiting the number of trains that can move through the country at any one time. We are afraid that the floods will spread to the south and may affect the Balkan countries soon."
MRC

MOSCOW (MRC) -- The global automotive plastics consumption market revenue is expected to grow from USD21,617 mln in 2012 to USD46112 mln by 2018 at an estimated CAGR of 13.4% from 2013 to 2018, as per Plastemart with reference to MarketsandMarkets.

In 2012, Asia-Pacific was leading in the Automotive Plastics Consumption volume by 50.5%, followed by Europe (28%), North America (11.3%), and rest of the world (10.1%). Among these regions polypropylene leads consumption by 37%, followed by polyurethanes (PU) (17.3%), acrylonitrile butadiene styrene (ABS) (12.3%), composites (11.5%), high density polyethylene (HDPE) (10.8%), polycarbonates (PC) (6.8%), and polymethyl methacrylate (PMMA) (4.4%), due to their easy forming properties and their availability at cheaper price than other materials.

The researchers on light weight plastic materials such as composite materials, reinforced plastics, and polymers have come up with improved material qualities that make them suitable for use in interior, exterior and under bonnet components of automobiles. The careful selection of these automotive plastics is very important in the industry as it enables designers to improve durability, meet load bearing requirements, and achieve reduction in vehicle weight. The Automotive Plastics are among one of the widely preferred alternatives for light-weighting of automobile as they offer enhanced properties such as superior impact strength, easy mold-ability, improved aesthetics, and reduced weight as compared to conventional automotive components such as High speed steel (HSS) and Aluminum. The increasing demand of passenger cars and the supply to fulfill the same in Asia-Pacific is one of the main drivers for increasing consumption of automotive plastics globally.

As MRC wrote previously, BASF has set up a new Coatings Technical Competence Center ASEAN in Bangkok, Thailand, aimed at ASEAN growing automotive market. This new facility supports technical and laboratory activities mainly in motorcycle coatings including technology transfer, product development, performance testing, color design and development, and houses a sales and marketing team as well as a technical service team of more than 20 professionals, all catering to motorcycle manufacturers in the ASEAN region.
MRC

MOSCOW (MRC) -- China's National Development & Reform Commission said on Wednesday that it has approved the acquisition by SK Group (Seoul) of a 35% stake in a USD2.7-billion petrochemicals complex at Wuhan, Hubei Province, said Chemweek.

Sinopec and SK signed a preliminary agreement in 2011 to form a petchems joint venture at Wuhan. Financial details were not disclosed. The complex, completed at the end of last year, is designed to produce 800,000 m.t./year of ethylene, 300,000 m.t./year each of high-density polyethylene and low-density polyethylene.

SK Energy Co. (096770.SE), South Korea"s largest refiner by capacity, holds the remaining 35% of the complex. The project will also produce key petrochemical products including 300,000 tons of high-density polyethylene, 300,000 tons of linear low-density polyethylene and 400,000 tons of polypropylene.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.
MRC

MOSCOW (MRC) -- Reliance Industries has outlined a three-year investment plan of 1.5 trillion rupees (USD26 billion) to further expand its businesses which range from gas production and oil refining to selling groceries and vegetables, reported The Wall Street Journal.

The plan Chairman Mukesh Ambani presented at a meeting of shareholders is bigger than what he announced a year ago, when he said the company would spend 1.0 trillion rupees over five years.

Mr. Ambani, India's richest man, said Reliance would invest in all the major sectors it operates, including in oil and gas, retail and communications. Most of the projects he mentioned are in India. Internationally, a key focus area is shale gas, because production from its three joint-venture shale-gas fields in the U.S. is helping the company offset falling natural gas output in India.

"Reliance has embarked on the largest investment program in its history," Mr. Ambani said at the meeting, but didn't provide specific details of the plans, including on launching its much-awaited broadband communications services.

Still, the investment plan of India's fourth-largest company by market value highlights its confidence in the country's economic growth, which slowed to its weakest in a decade in the fiscal year ended on March 31 but is expected to gather pace again from this year. The government, which has been facing criticism for slow policy reforms, has taken several steps since late 2012 to boost economic expansion and these include fast clearances for infrastructure and industrial projects and easier rules for foreign investment in some sectors.

As MRC informed previously, earlier Reliance unveiled an USD18 billion investment plan for India over the next five years. Besides, in late 2012, Reliance Industries announced its plans to expand capacity at its refineries in the western state of Gujarat.

Reliance Industries is one of the world"s largest producers of polymers. The company"s polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes.
MRC